This application include a microfiche appendix containing a database structure diagram made up of 50 sheets 20 frames.
1. Field of the Invention
The present invention relates to business-to-business Web commerce and to business automation systems.
2. State of the Art
Web commerce may be defined as the use of a computer network, such as the Internet, to do business, such as buy and sell products or services. Although Web commerce is still in its infancy, relatively speaking, Web commerce is predicted by some to soon become the dominant mode of business practice. Web commerce allows business to move much more quickly, without the burden and cost of paperwork.
Despite the promise of Web commerce, current Web commerce software is typically of very limited capability. Most Web commerce is consumer-oriented rather than business-oriented. The tacit assumption is that the purpose of the Internet should be to enrich people's personal lives more than to enable business to move at light speed. Furthermore, typically each transaction is treated in isolation. No on-going course of business is assumed or facilitated.
Material management functions such as procurement represent a substantial expense and burden for medium and large businesses. Purchases are typically subject to approval at multiple levels. In the case of the purchase of a computer, for example, an employee might submit a purchase request to the employee's supervisor, who might approve the request and forward it to the MIS (Management Information Systems) department, which might approve the request and forward it to accounting for budgetary approval. The real cost of such a process is estimated to be as much as $100 per purchase request. Furthermore, the time required for such a process to be completed may be weeks or months. In the meantime, productivity may suffer.
Purchasing, moreover, is only part of the larger problem of material management. Once materials have been procured, typically they must be tagged, tracked and accounted for, both physically and in accounting terms such as depreciation, etc. The latter activities may either be conducted in an organized fashion, often at considerable expense, or haphazardly, with marginal effectiveness.
Existing Web commerce software is likewise fraught with problems for the selling company. When an order is placed through the Web, it typically results in a fax or email, information from which must be manually entered into an internal sales system that may or may not be linked to other closed systems such as accounting, human resources, purchasing, assembly, etc. Hence, once the entry is made, depending on the degree of automation, additional manual intervention may be required to achieve the desired final result, e.g., ship a product to a customer. The purchaser is typically unable to determine the status of an order without placing a call or sending an email. Moreover, order fulfillment is again only a part of the larger problem of total customer satisfaction (which is in turn only a part of the larger problem of running a successful, profitable business). Returns are bound to occur and must typically be handled manually, typically by a Return Merchandise Authorization (RMA) or traffic department. Also, some fraction of shipments are bound to be lost or damaged. Related insurance claims typically must also be handled manually both by the traffic and accounting departments. Even though the foregoing activities are closely related functionally, the mechanisms for handling these activities, whether manual or automated, are often ad hoc.
On a business-wide scale, the same is largely true: the various activities of the business, while they may be separately automated, are not automated in a unified, synergistic fashion. Most often, different departments each have separate database systems with the departments being linked by a local- or wide-area network. A person in one department obtains information from a different department by sending an email and requesting a report. Referring more particularly to FIG. 1, in accordance with a typical model of business automation, various departments (e.g., sales, sales support, customer service, accounting, purchasing, receiving, engineering, assembly, shipping) are separately automated but linked together by a computer network (e.g, LAN, WAN). Each department interfaces to multiple different departments in an essentially manual fashion but using modern electronic communications tools--phone, fax, email, computer hardcopy, etc. Comparison of the resulting overall business process to a Rube Goldberg invention is apt, if mildly exaggerated. The process entails repeated transmission of duplicate information to different departments and repeated transmission of additional information and instructions to different departments on an as-needed basis. The party transmitting the information controls the amount and quality of information conveyed. The party receiving the information has no control over the information or the quality of the instructions received but rather is entirely dependent on the party transmitting the information. Duplication occurs both within departments and between departments. An external influence to the system (a call from a customer or vendor, a new customer account, a ruffled employee) can and often does cause a flurry of activities, but often produces less-than-commensurate positive results because of the inherent inefficiency of the system. The process, because it is ill-defined, is not easily reversible when an error has been made.
The foregoing model results in the fragmentation of information--"the right hand does not know what the left hand is doing." Information is transported from one place to another, either in hardcopy form, necessitating re-entry, or in such electronic form as to require substantial massaging, and with substantial latency such that by the time the information is to be used it is already outdated. A business executive, for lack of readily-available, accurate, verifiable information in usable form, must then rely heavily on subordinates to obtain a picture (hopefully accurate) of what is happening inside the company. Considerably employee time may be spent gathering historical data to satisfy the need for management information. The same factors that hamper management performance may also cause performance at lower levels within the company to suffer. Employees may lack timely information regarding critical tasks that need to be performed. For lack of timely information regarding returns, for example, or some other aspects of operations, accounting personnel may pay invoices that should in fact not be paid.
The lack of readily-available, verifiable information in usable form is most pronounced in relation to financial information. In the case of a sales company doing a substantial volume of business, for example, preparation of a state sales tax return may take ten man-days or more. An audit may take a similar amount of preparation. Closing the books on an accounting period is itself an arduous task. The time requirements and challenges posed by month-end and year-end closings are all-too-familiar to virtually all in-house accountants. Despite these heroics, the inherent latency of the process diminishes the value of the results. A finalized June statement, for example, might be received at the end of July or the beginning of August, hampering the ability to react quickly to changing business conditions.
For lack of readily-available, verifiable information in usable form, employee evaluation is often performed more on the basis of perception than objective reality. The appearance of performance then becomes at least as important as real performance. Employee performance and employee morale may suffer as a result.
Numerous "high-power" database application software packages exist in the marketplace, from such industry leaders as SAP, Peoplesoft, BAAN, and Oracle. The solutions of each of these vendors have strengths and weaknesses. SAP, for example, although strong in the area of fixed asset management and financials, does not provide shipping and receiving functions. To automate these functions requires the use of separate software. Furthermore, Web integration is problematic. BAAN is strong in the areas of shipping/receiving, manufacture and assembly, but is limited in the areas of fixed asset management and material handling. In particular, BAAN is bound by conventional notions of real inventory--an item must physically be in stock before it can be ordered (as contrasted with the concept of virtual inventory, explained more fully hereinafter). Peoplesoft offers strong human relations functions but is not strong in "back-end" functions. Software packages from Peoplesoft and BAAN are therefore often linked together to provided a more complete solution. Similarly, software from SAP may be linked to software from BAAN. Oracle offers discrete modules for almost all of the functions offered by the other software packages. The modules must be linked together in a laborious process, however. None of these software packages have a Web-centric design, nor has any been used to successfully implement an automatic ene-to-end business process, even in large corporations having no lack of resources.
Web-centric "e-business solutions" are offered by Pandesic (Intel and SAP), Actra (Netscape) and other (typically early-stage) companies. In the case of Pandesic, early promotional materials indicate a distinct consumer orientation as opposed to business-to-business. A conventional real inventory model is followed in which product must be warehoused and on-hand in order to allow the product to be ordered. Furthermore, Web operations are segregated from non-Web operations, necessitating duplication. In the case of Actra, a portfolio of commerce software, including legacy application integration modules, are designed to "bridge gaps between enterprises and applications," enabling business-to-business transactions, buyer-side and seller-side procurement, consumer on-line Internet storefronts, and commercial Internet publishing. This "gap-bridging" approach likewise entails substantial duplication.
Dell and Cisco each sells computer and networking equipment directly to consumers over the Web using configuration and order software developed by outside third parties. Business-to-business features, such as invoices, RMAs (particularly automatic "instant" RMAs) are lacking. The software does not provide an end-to-end Web-business solution.
A need therefore exists for software that enables end-to-end, business-to-business Web commerce and that automates to the greatest degree possible, in a unified and synergistic fashion, the various aspects of running a successful and profitable business. The present invention addresses this need.